You pay for it: Tax dollars help cover pensions for private lobbying

Taxpayer dollars help finance public pensions for private lobbying by governments of government

BRENDAN J. LYONS and JAMES M. ODATO Staff writer, Times Union

By BRENDAN J. LYONS and JAMES M. ODATO Staff writers

Updated 6:45 am, Monday, June 20, 2011

Stephen Acquario, executive director of New York State Association of Counties, testifies during an Assembly budget hearing in March 2011 on the subject of a property tax cap. (Paul Buckowski / Times Union)

Stephen Acquario, executive director of New York State Association...

Stephen J. Acquario, executive director of the New York Association of Counties. (Michael P. Farrell / Times Union)

Stephen J. Acquario, executive director of the New York Association...

Jeff Haber, executive director of New York State Association of Towns, testifies during an Assembly budget hearing at the legislative office building in Albany on March 2. (Paul Buckowski / Times Union)

Jeff Haber, executive director of New York State Association of...

Timothy G. Kremer, executive director of the New York State School Boards Association.
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Timothy G. Kremer, executive director of the New York State School...

Peter Baynes, executive director of the New York State Conference of Mayors and Municipal Officials.
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Peter Baynes, executive director of the New York State Conference...

Exterior of the N.Y.S. School Boards Association building in Colonie. (John Carl D'Annibale / Times Union)

A handful of nonprofit corporations, which for decades have carried the message of local municipalities and school districts to state lawmakers, have done so with the help of taxpayers. Their employees, whose salaries in some cases exceed the governor's, are enrolled in the state retirement system.

Yet they're not government workers. They are a largely unknown group of private employees enjoying public benefits.

It's been that way for decades for the state's Association of Counties, Conference of Mayors and Municipal Officials, Association of Towns and the School Boards Association. The groups, nonprofit corporations that lobby for their respective layers of government, are funded in large part from tax dollars paid in the form of annual dues. They also obtain revenues from grants, publications, seminars and insurance products.

Two of the groups -- the Association of Counties and the School Boards Association -- also pay "performance dividends" to employees and provide take-home vehicles for their directors.

Despite their inclusion in the state retirement system, the corporations are not subject to the Freedom of Information Law. They are not subject to competitive bidding restrictions. Hiring decisions are made subjectively rather than according to civil service rules. Their employees' salaries are not set by an act of the Legislature or a government agency, and bonuses and salary levels are generally left to the discretion of their executive directors. Plus there is no restriction on any of them from being hired back by their employers as highly paid consultants once they take their public pensions.

Several veteran state lawmakers said they were unaware the groups all are enrolled in the New York Common Retirement Fund even though it was done through an act of the Legislature decades ago.

"They're not state employees," he said. "The whole question is if they are looking to change the pension system for state workers they should do it for themselves. Put them in a 401(k) for a couple of years and see how it works; make it a test case. There's a little hypocrisy. If they're willing, maybe that's something that should be looked at as mandate relief."

Abbate, a Brooklyn Democrat, said that a few years ago, he was upset with the anti-labor rhetoric from some of the associations and considered introducing a bill that would knock them out of the pension system. "I don't think anyone who's not a government employee should be in the system. They make so much reference that government workers are not treated like people in the private sector, but here you have employees in the private sector who want to be treated like public workers."

Still, the groups do not hide behind their unique status and defend their work as important. They said most of their efforts relate to training and helping local governments navigate state mandates. A small portion of their work involves actual lobbying, they said, including trying to reform the state pension system because of the high costs of public employee retirement benefits.

In the four groups highlighted in this story, those public benefits are enjoyed by 59 retired association workers and 159 employees active during the last seven years, according to state records.

In an honorary showing of transparency, the organizations promptly turned over information about their staff salaries and budgets, although officials with the towns and school boards associations declined to provide specific employee salaries except for their executive directors.

"It's a very legitimate organization," said Stephen J. Acquario, who earns $192,400 a year as executive director of the counties association, which pays $625 a month for Acquario to drive a take-home Ford Explorer. He oversees a staff of 26 with wages that topped $1.01 million last year, including $130,000 for an intergovernmental relations director hired more than a year ago.

Acquario said he also distributed $5,700 in "merit pay" for seven employees, ranging from $250 to $1,500. The association, Acquario said, earns its money.

"The association provides a (way) to deliver a unified message to the state Legislature and to the governor," he said. "We testify before the legislature on local assistance aspects of the executive budget to give them the statewide perspective, they couldn't and wouldn't include county officials from all over the state to testify on local impact."

Acquario, an attorney, also holds the title of general counsel for the corporation, whose staff is made up largely of people who help coordinate lobbying -- they refer to it as "advocacy" -- on behalf of state's 62 counties. Suffolk and Erie counties dropped their NYSAC membership.

Erie County's decision to stop paying NYSAC dues was "purely financial," said Grant Loomis, spokesman for Erie County Executive Chris Collins. The county, which includes Buffalo and its affluent suburbs, hired Albany's Patricia Lynch Associates after it left NYSAC.

"If we were going to pay approximately $60,000 a year for lobbying Albany, the Collins administration believes we receive a better benefit with the PLA contract," Loomis said. "With PLA ,we are able to advocate for very specific legislation that benefits Erie County and we have had success. ... This is not a reflection on NYSAC at all or the work they do."

NYSAC's Acquario is a fixture around the Capitol, whether testifying before the Senate on the pitfalls of a property-tax cap, or lobbying against what some counties believe are financially debilitating mandates related to Medicaid and rising pension costs. The association has represented counties on state task forces and commissions related to Medicaid, mandate relief and broadband technology deployment.

"Having NYSAC involved affords the state statewide representation covering urban, suburban and rural communities of the state," Acquario said. "Over the decades, we have served on dozens of these commissions to represent the unique county perspective, in a bipartisan manner."

The bonuses given to employees of the School Boards Association are "designed to reward demonstrated success," said David Albert, director of communications and research for the association. "In 2010, the NYSSBA board of directors approved a performance dividend amount of $69,000, distributed to all employees in amounts recommended by the respective department heads."

Albert said eight of the NYSSBA's 53 employees are registered lobbyists, including five full-time lobbyists. "In addition, NYSSBA occasionally hires an outside lobbyist to work on specific issues."

G. Jeffrey Haber, executive director of the Association of Towns, is a former Schodack town supervisor who has been at the group's helm for 26 years. He oversees nine full-time and three part-time employees with an annual payroll of about $670,000.

"I get $30,000 a year salary because I'm retired," Haber said. "I retired back in 2003 and the retirement system allows you to continue in the position for whatever salary limit is set in law." His state retirement pension is $88,283 a year, boosting his annual income to roughly $118,000.

The association represents about 911 of the state's 932 towns.

"The purpose of this association is to promote efficiency in town government," Haber said. "We're not lobbyists like the lobbyists are. ... We don't contribute to campaigns; we provide technical assistance and training to town officials. The lobbying is important, but it's not our primary function."

In addition, the association pays $7,500 a month to former U.S. Rep. Michael McNulty, D-Green Island, who "is our one retained lobbyist," Haber said. "We haven't used him too much on the federal level ... but we have him do mostly stuff on the state level." McNulty is a former longtime state assemblyman and he also held public office in his Green Island hometown.

Peter Baynes, executive director of the Conference of Mayors, is paid $179,522 a year to head the organization created in 1910. The group has a $2.2 million operating budget with more than 60 percent of its revenue from membership dues paid by the state's cities and villages. Employee salaries account for about half of the organization's expenditures.

"As it relates to the pensions, the retirement system, we're held accountable to the same retirement and Social Security laws that any other employer is," Baynes said. "We're subject to the same contribution rate that any other employer is."

Baynes said much of their work centers on helping city and village governments operate more efficiently. "We do our advocating on the basis of making policy arguments, we don't get involved in the political aspect of lobbying; that is, making political contributions," he said.

Steve Swendimen, managing director for the National Association of Counties Financial Services Center, said the New York municipal organizations are not alone in their membership in the state retirement system.

"I think you will find across the nation that some organizations that represent local governments have been given the authority by state legislatures to participate in (government) retirement systems," said Swendimen, who is former executive director of the California Association of Counties.

Swendimen said that nearly all of the municipal corporations were initially set up to lobby Congress and state legislatures and over time were transformed into organizations that also provide training and education.

Nick Caimano, a former member of the Warren County Board of Supervisors and, before that, a Queensbury town councilman, said he attended training sessions organized by the municipal associations and found them to be of little value. "If both those associations ceased to exist tomorrow, the only thing that would happen is that our local governments would have more money."

Of the groups' lobbying efforts, Caimano said: "I have no idea why government has to lobby itself. Each of us has two lobbyists that are very well paid, and who work full time -- our senator and our assembly person. Why we have to pay more for the association to lobby for us is beyond me."

The leaders of the non-state agency groups, who can get raises without approval by the Legislature, may end up with pensions that well exceed what lawmakers, state commissioners, judges or governors will get in retirement. The payouts for everyone in the pension system are based on the top three years of compensation.

Sen. Hugh Farley, a member of the upper chamber for 35 years, said he was unaware of the situation and doesn't like the sound of it. "I don't think there's a lot of people that know this is happening," said Farley, R-Niskayuna. "I don't see why they need to be in the pension system."

Assemblyman John McEneny, D-Albany, said he also was not aware the associations are in the pension system. But he said if people heading public employee unions, such as Civil Service Employees Association President Danny Donohue, are enrolled as well then he doesn't see a problem.

Donohue, with 38 years of pension credit in the retirement fund, hasn't worked in a state job for decades. He leads CSEA as a registered lobbyist trying to influence legislation and contracts, and continues to get a state paycheck. But CSEA reimburses the state, allowing Donohue to build pension credits as president of the state's biggest public employee union.

Donohue said he was aware that some of the associations' employees are in the pension system and doesn't think it should stop. "I knew some of them were; I didn't know all of them were," he said. "When they start talking about pensions, the mayors' association or the league of counties, I dare say they're doing a little better than our people."

Public Employees Federation President Kenneth Brynien has a similar arrangement in which his state agency employer pays his salary, allowing him to be in the state retirement fund, while he serves PEF.

The comptroller allowed the groups into the pension system more than 40 years ago when the associations were tiny outfits whose leaders often left their public positions briefly to serve a stint before returning to office. Such people did not want to lose service credits. Dennis Tompkins, a spokesman for Comptroller Thomas DiNapoli, said restrictions on participating employers allowed groups in the system by 1968 to remain in.

Conservative fiscal watchdog E.J. McMahon said grandfathering individuals who are already covered was one thing, but allowing all future employees of these groups to enter the pension system was far too generous.

Sarah Hinman Ryan, director of news research, contributed to this report. Reach Brendan Lyons at 454-5547 or by email at blyons@timesunion.com.